SG Market (07 Jan 14)

Market Roundup: US stocks continued their sluggish star to the year with a third day of losses after the surperb gains in 2013 on an unexpected slowdown in growth of the services sector data and ahead of the jobs report at the end of the week. Investors may be hesistant with earnings season just round the corner as well as FOMC minutes due to be released on Wed. But the main event will be Fri’s nonfarm payrolls report for Dec. In economic news, the ISM services index slipped to 53 in Dec from 53.9 the previous month in Nov as new orders plunged to a four-year low. On the flip side, factory orders climbed 1.8% in Nov, led by a surge in aircraft demand. Market watchers are not surprised to see the market working off its overbought condition after the huge year-end rally. A modest pullback to 1,794 or 50-day moving average level on the S&P 500 may be warranted and reasonable. Asian markets ended lower after a rising yen hit Japanese equities, while converns over new listings weighed on Chinese stocks. Regional sentiment may be affected by trade, inflation and loans data from China later this week. Coming off its overbought levels, the STI is expected to range-trade between 3,100 support and 3,160 resistance points. Stocks to watch: *Midas: Its 32.5% owned JV Nanjing SR Puzhen Rail Transport Co has bagged two contracts worth Rmb1.11b for delivery between 2015 and 2016. One is to supply 85 train cars for the Suzhou Rail Transit Line 2 Extension, while the other is to supply 78 additional train cars to Nanjing Metro Line 1. Both contracts are slated for delivery between 2015 and 2016 *OCBC: Confirmed that it is in exclusive talks with the Fung family of Wing Hang Bank to discuss terms for a possible takeover offer for the HK bank but there is no deal reached yet and any potential acquisition would require regulatory approval from MAS and HKMA. *ST Engineering: Secured $446m worth of orders in 4Q13 for logistics management, maintenance, major upgrade/conversion projects, repairs and upgrades of various offshore support vessels including drillship and pipe-laying vessels, as well as to design a waste system for a high-rise development in Guangzhou, China. This is in addition to recent US$350m contract won by its US shipyard VT Halter Marine to build two container roll-on/roll-off vessels and the bareboat charter of a ro-ro passenger ship by Nova Star Cruise. *CNA: Clinched two contracts totalling over $9m from S’pore Changi Airport to install a new Building Management System (BMS) in Terminal 2 and VIP Complex, with completion by Mar 2015, as well as a four-year contract extension for the operations and maintenance of an integrated BMS till Dec 2017. The inclusion of these contracts plus other wins in 4Q13 would raise its order book to $102.3m. *Federal Int’l: Secured a $32m order for the supply of flowline control and related equipment with delivery within 14 months. This brings the total order wins to-date to $70m. *Blumont: Secured a US$30m loan facility from Wintercrest Advisors, of which US$21.8m is earmarked for investments, US$3.2m will be for working capital and the rest are for drawdown and arranger fees. Facility bears 10% per annum interest, payable monthly. Loans drawn must be repaid in full six months from the first drawdown. *Kreuz: Received approval from SGX for the delisting of the company following privitisation offer by The Headland Private Equity Fund at $0.80 per share. *Sarin: Launched a new Instructor 3.0 software, developed to improve the accuracy of polished diamond modeling, in-process polishing control and user-friendliness.